A crossbench Senate inquiry into the Murray-Darling Basin Plan has held hearing in Broken Hill.

Broken Hill’s drinking water comes from the near bone-dry Menindee Lakes, but with estimates that they will run out of potable water in January, locals have little sympathy for irrigators who want less water to be released back into the system.

The Senate inquiry – with Senator David Leyonhjelm at the wheel - is looking at whether the scheme has found a proper balance of social, environmental and economic needs.

Senator Leyonhjelm indicated he thought the outcomes were off-kilter.

“Irrigation in this area is not a huge issue. There has been some irrigation in the past but that's dwindled away in the current environment,” the committee chair said.

“So the main thing is, has Broken Hill lost its water unreasonably?”

When they were introduced three years ago, the Murray Darling reforms sought to ensure the long-term survival of the vital river system by focusing on environmental releases through government water buybacks.

But with Broken Hill looking at relying on bore water for at leats the next few years, the Broken Hill City Council says the plan is not working.

Local councillors at the hearing condemned the 2013 decision by the Murray-Darling Basin Authority to let water out of the lakes.

Councillor Marion Browne claimed the decision contributed to the city’s ongoing water shortage.

“It was water that we believe Broken Hill would have relied on, it was released at a time when there were no significant inflows were predicted, and the result is that it has certainly hastened the situation that we are currently in,” Cr Browne said.

Other speakers at the hearing said the dry Lake Menindee was “killing the towns”, and “absolutely destroying the small communities”

When there is water in the lakes, they are popular place for swimming, water recreation, tourists and visitors.

“In tourism, in our businesses, in our health and wellbeing. There's nothing left for us. We rely on our businesses, we rely on tourism for our business,” Menindee resident and member of the regional tourism association Karen Page said.

Local health authorities have put out warnings saying the water in the Darling River near Menindee is not safe for human consumption or domestic use.

Ms Page said it was particularly bad for the nearby Aboriginal communities.

“Our community members can't just put a ‘For Sale’ sign out and move, they just haven't got the opportunity to do that,” she said.